Gold price has continued lower yesterday towards $1,270. We mentioned in previous analysis that the area of $1,250-70 is important support area and I believe the downward move from $1,391 will end inside or near this support area. The bounce I expect will retrace 38% or 50% and this will be a good sell opportunity for traders as my longer-term picture is bearish with targets below $1,180.
Short-term trend remains down and short-term resistance is found at $1,288. Intermediate-term resistance is found at $1,298-$1,300. If the intermediate-term trend is broken, we can safely say that the decline from $1,391 is over and an upward correction has started.
In the daily chart above I show what should be expected by Gold price if the low is in, and we do not see lower levels. My 1st target of the upward bounce is the 38% retracement. My second target is the 50% retracement. I believe that the Ichimoku cloud will play its role in providing us with the target of the bounce and the resistance that will stop any upward move that could challenge $1,391.
